Project Scope Management

Complied by Heng Sovannarith

What is Project Scope Management?

• Scope refers to all the work involved in creating the products of the project and the processes used to create them

• A deliverable is a product produced as part of a project, such as hardware or software, planning documents, or meeting minutes

• Project scope management includes the processes involved in defining and controlling what is or is not included in a project

Project Scope Management Processes • Scope planning: deciding how the scope will be defined,

verified, and controlled

• Scope definition: reviewing the project charter and preliminary scope statement and adding more information as requirements are developed and change requests are approved

• Creating the WBS: subdividing the major project deliverables into smaller, more manageable components

• Scope verification: formalizing acceptance of the project scope by key project stakeholders

• Scope control: controlling changes to project scope which impact project cost and time goals

Project Scope Management Summary

Scope Planning and the Scope Management Plan

• The scope management plan is a document that includes descriptions of how the team will prepare the project scope statement, create the WBS, verify completion of the project deliverables, and control requests for changes to the project scope

• Key inputs include the project charter, preliminary scope statement, and project management plan

• It should be reviewed with the project sponsor to make sure the approach meets expectations

Project Scope Management

What Went Right? • Many financial service companies use customer relationship

management (CRM) systems to improve their understanding of and responsiveness to customers

• A senior management team at the Canadian money management company Dynamic Mutual Funds (DMF) launched an enterprise-wide, national program to build and manage its customer relationships

• They needed a faster and more organized, highly participative approach, so they proposed a new seven-step concept called project scope design

• DMF won an eCustomer World Golden Award for world-class innovation

6

What Went Right? The Seven Steps 1. Analyze the project atmosphere, staekholders and centers

of influence

2. Align the project scope with the organization’s strategic objectives and business challenges

3. Determine where to add value to the business

4. Study the process flow between the business units

5. Develop an efficient communication strategy

6. Develop the project approach

7. Coordinate the new project with the other initiatives already under way

Sample Scope Management Plan

Sample Project Charter

Scope Definition and the Project Scope Statement

• The project team develops a preliminary scope statement in initiating a project as part of the project integration management knowledge area

• The preliminary scope statement, project charter, organizational process assets, and approved change requests provide a basis for creating the more specific project scope statement

Scope Definition and the Project Scope Statement

• Project scope statements should contain at a minimum: – Description of the project – overall objectives, justification

– Detailed descriptions of all project deliverables

– Characteristics and requirements of products and services produced as part of the project

• Other helpful information: – Project success criteria

– Project boundaries

– Product acceptance criteria

– Schedule milestones

– Order of magnitude costs estimates…

Further Defining Project Scope

Work Breakdown Structure (WBS) • A WBS is a deliverable-oriented grouping of the

work involved in a project that defines the total scope of the project

• WBS is a foundation document that provides the basis for planning and managing project schedules, costs, resources, and changes

• Decomposition is subdividing project deliverables into smaller pieces – A work package is a task at the lowest level of the WBS

– Tasks on a WBS represent work that needs to be done to complete the project, not specifications (e.g., type of server)

Work Breakdown Structure (WBS) • The project scope statement and project

management plan are the primary inputs for creating a WBS

• The outputs include the WBS itself, the WBS dictionary, a scope baseline and updates to the project scope statement and scope management plan

• The WBS is often depicted as a task-oriented family tree of activities – The WBS can be organized around project products,

project phases or using the project management process groups

Partial WBS Organized by Product Areas

17

Partial WBS Organized by Project Phase

18

Partial Intranet WBS in Tabular Form 1.0 Concept 1.1 Evaluate current systems 1.2 Define Requirements 1.2.1 Define user requirements 1.2.2 Define content requirements 1.2.3 Define system requirements 1.2.4 Define server owner requirements 1.3 Define specific functionality 1.4 Define risks and risk management approach 1.5 Develop project plan 1.6 Brief Web development team 2.0 Web Site Design 3.0 Web Site Development 4.0 Roll Out 5.0 Support

Intranet WBS and Gantt Chart in Microsoft Project

20

Intranet Gantt Chart Organized by Project Management Process Groups

Approaches to Developing WBSs • Using guidelines: some organizations • The analogy approach: review WBSs of similar

projects and tailor to your project • The top-down approach: start with the largest

items of the project and break them down • The bottom-up approach: start with the specific

tasks and roll them up • Mind-mapping approach: mind mapping is a

technique that uses branches radiating out from a core idea to structure thoughts and ideas

Project Scope Management

Mind Mapping • Mind Mapping is a way of creating pictures that

show ideas in the same way that they are represented in your brain.

• Your brain uses words, pictures, numbers, logic, rhythm, color and spatial awareness to build up unique pictures of information.

• The ideas are linked together in a way that makes it easy to understand and remember.

• http://www.novamind.com/mind-mapping/ • http://www.youtube.com/watch?v=MlabrWv25

qQ

23

Mind Mapping

Mind Mapping • Use just key words, or wherever possible images. • Start from the center of the page and work out. • Make the center a clear and strong visual image that depicts the general theme of the

map. • Create sub-centers for sub-themes. • Put key words on lines. This reinforces structure of notes. • Print rather than write in script. It makes them more readable and memorable. Lower

case is more visually distinctive (and better remembered) than upper case. • Use color to depict themes, associations and to make things stand out. • Anything that stands out on the page will stand out in your mind. • Think three-dimensionally. • Use arrows, icons or other visual aids to show links between different elements. • Don't get stuck in one area. If you dry up in one area go to another branch. • Put ideas down as they occur, wherever they fit. Don't judge or hold back. • Break boundaries. If you run out of space, don't start a new sheet; paste more paper

onto the map. (Break the 8x11 mentality.) • Be creative. Creativity aids memory. • From http://www.peterrussell.com/MindMaps/HowTo.php

Sample Mind-Mapping Approach for Creating a WBS

Resulting WBS in Chart Form

The WBS Dictionary and Scope Baseline

• Many WBS tasks are vague and must be explained more so people know what to do and can estimate how long it will take and what it will cost to do the work

• A WBS dictionary is a document that describes detailed information about each WBS item

• The approved project scope statement and its WBS and WBS dictionary form the scope baseline, which is used to measure performance in meeting project scope goals

Sample WBS Dictionary Entry

Sample WBS Dictionary Entry (cont.)

Creating a WBS and WBS Dictionary* • A unit of work should appear at only one place in the WBS

• The work content of a WBS item is the sum of the WBS items below it

• A WBS item is the responsibility of only one individual, even though many people may be working on it

• The WBS must be consistent with the way in which work is actually going to be performed; it should serve the project team first, and other purposes only if practical

*Cleland, David I. Project Management: Strategic Design and Implementation, 1994

Creating a WBS and WBS Dictionary *

• Project team members should be involved in developing the WBS to ensure consistency and buy-in

• Each WBS item must be documented in a WBS dictionary to ensure accurate understanding of the scope of work included and not included in that item

• The WBS must be a flexible tool to accommodate inevitable changes while properly maintaining control of the work content in the project according to the scope statement

*Cleland, David I. Project Management: Strategic Design and Implementation, 1994

Scope Verification

• It is very difficult to create a good scope statement and WBS for a project

• It is even more difficult to verify project scope and minimize scope changes

• Scope verification involves formal acceptance of the completed project scope by the stakeholders

• Acceptance is often achieved by a customer inspection and then sign-off on key deliverables

Scope Control • Scope control involves controlling changes to the

project scope • Goals of scope control are to:

– Influence the factors that cause scope changes – Assure changes are processed according to procedures

developed as part of integrated change control – Manage changes when they occur

• Tools for performing scope control include a change control system and configuration management

• Variance is the difference between planned and actual performance

Best Practices for Avoiding Scope Problems

1. Keep the scope realistic: Don’t make projects so large that they can’t be completed; break large projects down into a series of smaller ones

2. Involve users in project scope management: Assign key users to the project team and give them ownership of requirements definition and scope verification

3. Use off-the-shelf hardware and software whenever possible: Many IT people enjoy using the latest and greatest technology, but business needs, not technology trends, must take priority

4. Follow good project management processes: there are well-defined processes for managing project scope and others aspects of projects

Suggestions for Improving User Input • Develop a good project selection process and insist

that sponsors are from the user organization

• Have users on the project team in important roles

• Have regular meetings with defined agendas, and have users sign off on key deliverables presented at meetings

• Deliver something to users and sponsors on a regular basis

• Don’t promise to deliver when you know you can’t

• Co-locate users with developers

Suggestions for Reducing Incomplete and Changing Requirements

• Develop and follow a requirements management process

• Use techniques such as prototyping, use case modeling to get more user involvement

• Put all requirements in writing, keep them current and readily available

• Create a requirements management database for documenting and controlling requirements

Suggestions for Reducing Incomplete and Changing Requirements

• Provide adequate testing and conduct testing throughout the project life cycle

• Review changes from a systems perspective – Project scope changes must include associated cost and

schedule changes – Focus on approved scope goals and don’t get side tracked

• Emphasize completion dates to help focus on what’s most important – What should we drop in order to add something new?

Using Software to Assist in Project Scope Management

• Word-processing software helps create several scope-related documents

• Spreadsheets help to perform financial calculations and weighed scoring models, and develop charts and graphs

• Communication software like e-mail and the Web help clarify and communicate scope information

• Project management software helps in creating a WBS, the basis for tasks on a Gantt chart

• Specialized software is available to assist in project scope management

Methods for Selecting Projects

• There are usually more projects than available time and resources to implement them

• It is important to follow a logical process for selecting IT projects to work on

• Methods include: – focusing on broad needs

– categorizing projects

– performing financial analyses

– using a weighted scoring model

– implementing a balanced scorecard

Focusing on Broad Organizational Needs

• It is often difficult to provide strong justification for many IT projects, but everyone agrees they have a high value

• “It is better to measure gold roughly than to count pennies precisely”

• Three important criteria for projects: – There is a need for the project

– There are funds available

– There’s a strong will to make the project succeed

Categorizing IT Projects

• One categorization is whether the project addresses

– a problem

– an opportunity

– a directive

• Another categorization is how long it will take to do and when it is needed

• Another is the overall priority of the project

Financial Analysis of Projects

• Financial considerations are often an important consideration in selecting projects

• Three primary methods for determining the projected financial value of projects:

– Net present value (NPV) analysis

– Return on investment (ROI)

– Payback analysis

Net Present Value Analysis

• Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time

• Projects with a positive NPV should be considered if financial value is a key criterion

• The higher the NPV, the better

Net Present Value Example

Uses

Excel’s

npv

function

Note

that

totals

are

equal,

but

NPVs

are

not.

NPV Calculations • Determine estimated costs and benefits for the

life of the project and the products it produces

• Determine the discount rate (check with your organization on what to use)

• Calculate the NPV

• Notes: Some organizations consider the investment year as year 0, while others start in year 1. Some people enter costs as negative numbers, while others do not. Check with your organization for their preferences.

Return on Investment • Return on investment (ROI) is calculated by

subtracting the project costs from the benefits and then dividing by the costs ROI = (total discounted benefits - total discounted

costs) / discounted costs

• The higher the ROI, the better

• Many organizations have a required rate of return or minimum acceptable rate of return on an investment

Example of ROI

• For example, a program costs $3 million and accrues $8 million in benefits

• First calculate the net benefits ($8 million minus $3 million equals $5 million).

• Then divide the net benefits by the total costs ($5 million divided by $3 million).

• The result—1.67—is the ROI, which is typically expressed as a percentage (167 percent).

• Thus, the investment (i.e., the cost) will generate a return (i.e., net benefit) that amounts to 167 percent of the cost of the investment.

Payback Analysis

• Another important financial consideration is payback analysis

• The payback period is the amount of time it will take to recoup, in the form of net cash inflows, the net dollars invested in a project

• Payback occurs when the cumulative discounted benefits and costs are greater than zero

• Many organizations want IT projects to have a fairly short payback period

Charting the Payback Period

Figure 3-4. Charting the Playback Period

Weighted Scoring Model

• A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria – First identify criteria important to the project selection process – Then assign weights (percentages) to each criterion so they add up

to 100% – Then assign scores to each criterion for each project – Multiply the scores by the weights and get the total weighted

scores

• The higher the weighted score, the better • See “What Went Right?” for a description of how a

mortgage finance agency uses a weighted scoring model for IT projects

Figure 3-5. Sample Weighted Scoring Model for Project Selection

Implementing a Balanced Scorecard

• Drs. Robert Kaplan and David Norton developed this approach to help select and manage projects that align with business strategy

• A balanced scorecard converts an organization’s value drivers, such as customer service, innovation, operational efficiency, and financial performance to a series of defined metrics

• See www.balancedscorecard.org for more information